Semiconductor policy guidelines soon: Raja

The government will soon issue guidelines on semiconductor manufacturing policy, a move that is likely to attract global chip makers to the Indian shores.

"We have a meeting later in the day... We will very soon issue guidelines on semiconductor manufacturing policy," IT and communications minister A Raja told PTI on the sidelines of an event.

To encourage investments on semiconductor fabrication and other micro and nanotechnology manufacturing industries, the government in February this year announced special incentives and the policy is expected to attract investments of over $10 billion in semiconductor industry in the country.

Under the policy, the government would offer capital subsidy in the form of tax breaks to companies for setting up chip manufacturing units in India.

The policy provides for 25% subsidy on the capital expenditure incurred in the first 10 years in units located outside SEZs and 20% for those located in SEZs. The minimum investment for availing incentive package stands at Rs 2,500 crore for chip fab units and Rs 1,000 crore for ecosystem players.

SemIndia and HSMC had already announced their plans to set up fab units in the country, entailing investments of $3 billion and $4 billion respectively.

Moser Baer has also announced plans to establish a thin solar fab with an investment of $250 million while California's Signet Solar announced an investment of $2 billion for photovoltaic modules in India.

However, the world's largest chip maker Intel Corp had shelved its plans to set up a manufacturing plant in the country following the government's dilly-dallying over the announcement of semiconductor policy.